Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

Alex and Grace are back to cover the biggest, best, and baddest technology news. We are back once again here with your weekly kickoff! Here’s what we got into:

• Stocks are down around the world, with nearly every major index that we checked falling 2% or more.
• Crypto prices are in the tank, with bitcoin and ether losing double-digit percentage points in the last day; the mess in crypto-land is deep this morning.
• Celcius network is falling apart, despite huge recent fundraises. Precisely what happens next is not clear, but it doesn’t look good for the company, judging by its imploding token price.
• In better news, the Latin American startup scene re-upped its capital reserves right before the world went risk-off, implying that the region could be well capitalized heading into the rest of the year.
• The Coinbase CEO’s Twitter rant after some of the company’s employees expressed displeasure was notable, in tone, and also in terms of PR strategy.

So, yeah, not the happiest show that we have ever recorded but one that matches the moment. As we stressed on the audio version, you are not your net worth. We will get through this.

Finally, Equity is live this Thursday, so come hang on Hopin or Twitter Spaces!

Shares of DocuSign are off 25% in pre-market trading today after it reported earnings last night, pushing the value of shares in the e-signature company under pre-COVID levels.

Given that the market is valuing DocuSign at a cheaper price than it did in early 2020, you might think that it is struggling. Hardly. Coming off a huge period of pandemic-fueled growth, DocuSign posted 25% in top-line expansion in its most recent quarter, with revenue coming in at $588.7 million, around $7 million ahead of street expectations. Even more, the company’s growth target for its current fiscal year brackets investor expectations.

The Exchange explores startups, markets and money.

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Confused by DocuSign undergoing such a sharp repricing after reporting better-than-expected trailing growth and in-line guidance? Don’t be. DocuSign has committed the new cardinal sin of technology companies: losing more money as growth slows.

As market mania fades from 2021 highs, investor expectations are changing rapidly and it’s catching a host of technology companies flat-footed.

The shock of the end of the growth-at-all-costs era is not merely a shift from a preference for revenue expansion toward profitability. No, many tech companies are currently navigating a deceleration to their more natural rate of growth, while profit demands are rising. It’s hard to retard a growth deceleration while also making more money, but that’s what investors want. And signs abound that it’s not going well.

Pivot to profits

DocuSign’s quarter included free cash flow of $174.6 million, up from $123.0 million in the year-ago period. But at the same time, GAAP net income got worse at the former unicorn:

GAAP net loss per basic and diluted share was $0.14 on 200 million shares outstanding compared to $0.04 on 194 million shares outstanding in the same period last year.

That’s a no-no.

Tech companies are racing to avoid the same fate. The pivot to profitability — really the pivot to losing less money — is in effect around the world. A few recent bits of news make our case:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

The show is largely off this week, which means that we don’t have our usual deluge of new startup news covered for you. But, we didn’t want to leave you with nothing at all on this lovely Friday, so we went to the time machine to see what we could find.

The episode in the feed today is the same episode we put out nearly exactly one year ago today (June 11, 2021) to give some flavor and context to what was going on a now a year past. The idea was that we’ve spent so much time talking about how 2022 is shaping up to be different than 2021, so why not go back and show the distinction?

We hope you like our fun little experiment. The show returns to regular form Monday.

Equity drops every Monday at 7 a.m. PDT and Wednesday and Friday at 6 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts

Tatsumeeko, an “MMORPG-lite” game on Ethereum and Solana developed by the team behind cross-gaming platform ecosystem Tatsu.GG, announced today that it has raised $7.5 million in seed funding. The round was co-led by DeFiance Capital, Delphi Ventures and BITKRAFT Ventures, with participation from investors including Binance Labs, Animoca Brands, Dialectic and GuilldFi. The funding will be used to continue development on Tatsumeeko.

This brings the company’s total raised to $8.1 million in two rounds.

Tatsu.GG, created to for Discord community gamification and engagement, currently claims 60 million users and 1.4 million Discord communities. It was launched in 2016, when its founding team saw an opportunity to create a Web3 gaming community on Discord, increasing user retention, acquisition and interaction.

Tatsumeeko will be a role-playing game available through Discord, plus iOS, Android and the web. It centers around a world called Ielia, where players can fight against monsters, build communities and meet other gamers. In the process, they are also introduced to crypto and NFTs in what the team calls a “seamless” way.

With an introductory version of the game reaching 60,000 monthly active users and 4.5 million in traded items, Tatsumeeko is now set to launch a broader version with main and side story quests, co-op raids, dimensional invasions and player versus environments combat with in-game token rewards.

NFT projects can integrate directly into Tatsumeeko through their Discord. At the beginning of July, it will start the initial sale of Aethereal Parcels, or pieces of land that provide utility and special attributes to collectors, and the players who interact with them. Last November, the game launched Meekolony Pass, a series of 10,000 genesis NFTs on Solana that give holders benefits, rewards and airdrops for items in Tatsumeeko.

Tatsumeeko’s goal is to expand to other social platforms like QQ, WeChat, and Telegram, as well as Ethereum and Solana communities.

Co-founder David Lim said he wanted to create a MMORPG-lite because he grew up playing traditional MMORPGs, like Everquest, Guild Wards, Maplestory and, most recently, FInal Fantasy XIV.

But MMORPGs take up a lot of time and effort for players to fully enjoy the entire experience, he added. On the other hand, Tatsumeeko is meant to combine the best parts of an MMORPG—like a strong storyline, social features, exploration, character progression, quests and combat—without time-consuming tasks like grinding for levels. Instead, those are automated for players.

“MMORPGs have always been really good at one thing—helping organic communities to form,” Lim told TechCrunch. “What we’re doing with Tatsumeeko is we’re taking this concept and applying it to Discord where many communities already exist and helping those communities to supercharge their growth in areas of community engagement, retention and user acquisition.”

Tatsumeeko is meant used not only by players, but also companies, games and NFT projects as an infrastructure to integrate their own projects into Discord’s ecosystem and build a community, provide utility for their NFTs and increase brand awareness through the communities that the game is available on.

“Perhaps you can think of it as instead of building a metaverse and trying to move entire communities of Discord into the metaverse, we’re brining the metaverse to Discord itself with Tatsumeeko,” said Lim.

For people who are unfamiliar with crypto and NFTs, Tatsumeeko will serve as an introduction by targeting both Web2 and Web3 players. Lim said people can start playing the game without having to create a wallet, buy NFTs or crypto. “You can think of us as using crypto and NFT technology behind the scenes to ensure that our players have more control over their in-game assets if they so choose,” he said.

“For a long time, games have been really good at teaching players entirely new concepts,” Lim added. “That also includes trading and buying in-game assets and currency within Tatsumeeko’s own marketplace.”

No matter whether you prefer to track the public or private markets, 2022 has proven to be a messy year for software companies.

After a bullish 2021, when investors sent software stocks into the stratosphere, startups rode the same wave of enthusiasm to new heights. Since then, we’ve tracked the pullback in value that software companies have endured, as well as the resulting knock-on effects on startup fundraising and pricing.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

You’re probably tired of the bad news by now. We understand, and to combat the general ominous vibe surrounding startup founders, we’ve been fishing for the good news. We hit on some of it over the weekend, and we’re back with more.

GitLab just showed that it’s possible to make investors so very happy that they reprice you by more than 25% in a single day. Let’s find out how — and we’ll loop in the latest from Salesforce to undergird our point.

GitLab’s quarter

Shares of GitLab rose just over 28% yesterday to $51.00 per share, up $11.16 in a single day. And investors aren’t changing their mind, with shares of the developer-focused git service not giving back much, if any, of those gains in pre-market trading.

What did GitLab have to accomplish to see such a dramatic repricing from investors? The rare public market triple-crown: It beat on revenue, profitability, and outlook in the quarter. Here’s the data:

• Revenue growth of 75% to $87.4 million, ahead of analyst expectations of $78.1 million, and faster than the 69% growth it recorded in the previous quarter.
• Adjusted loss per share of $0.18, better than the $0.27 per share loss expected in the quarter.
• Raised revenue forecast of $93.5 million to $94.5 million for the current quarter, and $398.0 million to $402.0 million for the current fiscal year. Both ranges are ahead of the $93.14 million (quarter) and $398.51 million (year) that Yahoo Finance calculates as the current analyst average.

Even more, for you SaaS fans out there, GitLab saw “dollar-based net retention above 130%,” which is rather impressive. In short, GitLab accelerated growth, beat revenue and profit expectations, and raised its outlook to levels that put it ahead of current street estimates.

Now, as it is 2022, there is of course a little bit of bad news: even after its huge bump in stock market value, GitLab’s stock still trades far below its record high last year.

Continual, a startup that focuses on simplifying operational AI on top of a modern data stack, today announced that it has raised a $14.5 million Series A funding round led by Innovation Endeavors. In addition, the company today announced that its cloud platform is now generally available.

The company, which focuses its AI efforts on predictive models for things like inventory forecasts, risk mitigation and supply chain logistics, previously raised a $4 million seed round, which it announced last December. Other investors in this new round include Amplify Partners, Illuminate Ventures, Inspired Capital, Data Community Fund, Activation, New Normal, GTMfund, as well as angels Tomer Shiran (founder of Dremio) and Tristan Handy (founder of dbt Labs).

Enterprises now own massive amounts of data but it remains difficult for them to take this information, which typically sits in a data warehouse like Snowflake or AWS Redshift, and turn it into predictive models. The idea behind Continual is to allow them to do this without having to reinvent the wheel. The service isn’t a low-code/no-code tool but it does put an emphasis on making its features accessible in that it allows data teams to leverage skills they already have — like SQL and dbt — to quickly build AI models and put them into production.

Looking ahead, Continual will add some more advanced features, too. “To better support advanced users, we’re adding support for machine learning engineers to extend Continual’s automated machine learning engine with custom models and then expose these new capabilities to all users in their organization,” the company’s CEO and co-founder Tristan Zajonc explained. “We ultimately see Continual as being powered by an ecosystem of AI capabilities both developed internally and externally.”

One of these advanced features is the ability to extend Continual’s MLOps service with custom capabilities, which is now available in preview. But the company also has quite a few more of these more advanced features in the pipeline. Continual also plans to launch new automated feature engineering capabilities to simplify the machine learning workflow, for example. And later this year, the company also plans to introduce support for real-time feature and model serving, something its customers have been asking for.

Zajonc noted that just in the last three months, the company managed to double the number of active users and deployed models, as well as its booked annual recurring revenue. Those are obviously numbers that make VC’s perk up their ears, so it’s maybe no surprise that Continual was able to raise this new round so soon after its seed funding.

“Over the last few years, we’ve seen predictive analytics and AI become the lifeblood of today’s leading enterprises,” Harpinder (Harpi) Singh, Partner at Innovation Endeavors. “But most companies still struggle to infuse AI broadly in their organizations. We believe Continual’s approach to building directly on an organization’s existing cloud data platforms and empowering all user types, not just machine learning engineers, is the right recipe to unlock the potential of AI for every organization.”

Now, the plan is to double the team by the end of 2022 to support all of these new customers and build these new advanced features.

Salary Hero wants to provide lower-income Thai workers with more financial flexibility. The startup, which focuses on earned wage access and finance education, with plans to add neo banking products, too, announced today it has raised $2.8 million. The funding included participation from Global Founders Capital, M Venture Partners, 500 Global, 1982 Ventures, Titan Capital and Thai corporations and angel investors.

Salary Hero was founded in late 2021 by former Bain & Co. Bangkok executives Jonathan Nohr and Prabhav Rakhra. Both were also former bankers at Credit Suisse and Barclays. Other members of the founding team include Tep Neeranatpuree former head of corporate sales at Lalamove, and Thanakij Pechprasarn, former CTO at edtech startup Gantik.

Salary Hero’s team

Rakhra said that while working at Bain, he and Nohr focused on financial services engagements. “With our common backgrounds both being in investment banking, and while working on strategy cases for various banks in Southeast Asia, we experienced how banks continuously de-prioritize lower income customer segments,” he told TechCrunch. That is because they aren’t as profitable as affluent demographics. As a result, Rakhra added, lower-income customers end up paying more than wealthier individuals for the same basic financial services.

“It seems fundamentally wrong that people with fewer means should pay more for financial services, if they have access at all,” he said. “We saw an opportunity to use technology to help level the playing field in Thailand and Southeast Asia.”

By being able to access their earned wages on demand, workers are able to better handle emergencies and unforeseen expenses, instead of being forced to borrow from lenders who charge 10% to 30% interest per month, Rahkra said. “These compounding rates lead to cycles of debt that are very hard to break free from,” he said. “Additionally, financial uncertainty and a lack of a financial safety net creates a lingering feeling of insecurity, and is the main cause of mental stress among workers.” He added that 80% of Thai workers who make less than $1000 USD a month have used loan sharks at some point.

The company says it has seen double-digit week-on-week user growth in 2022 among its clients in the manufacturing, logistics, hospitality and retail sectors. Salary Hero works with companies with as little as 100 staff members on their payroll, but their initial focus is on companies with a full-time headcount of between 500 to 50,000. Rakhra said that by addressing the financial needs of their workers, companies are able to improve employee satisfaction and reduce turnover in a competitive labor market. The company monetizes by charing a low access fee for its earned wage access, but does not charge interest or other hidden fees, Rakhra said.

In the future, Salary Hero plans to add neo banking products, including at-source savings accounts, insurance products, remittances and other financial services like micro-investments and debt restructuring advice. These other products will go live in 2023, while Salary Hero’s earned wage access and financial education features are already live.

In a prepared statement, M Ventures Partner CEO Mayank Parekh said, “We’re proud to be backing Salary Hero, supporting their innovative solution for employers to differentiate themselves in an increasingly competitive labor market. The future of payroll is one where we say goodbye to traditional pay cycles. Salary Hero empowers workers, and at the same time, solves immediate challenges for employers-driving retention, recruitment and productivity of their workers.”

In startup land, it’s easy to get distracted by the brightest lights. Some companies excel, earning the business equivalent of a halo, casting their own luminance. And then, of course, there are the implosions and crashes that kick off waves of photons that inevitably blanket our pages.

During the pandemic, companies like Zoom and Peloton earned (temporary) radiance. More recently, we’ve been captivated by the flashing warning lights coming from companies like Better.com, Fast, and Bolt. We sometimes fail to balance our coverage of the dazzling with the less sexy but still noteworthy startup triumphs and tragedies.

The Exchange explores startups, markets and money.

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Today, we’ll attempt a corrective. On the other end of the newsiness spectrum are companies that grow consistently, don’t burn too much money — and therefore don’t raise too often — and stay busy doing things that don’t demand headlines.

Last year, these companies were forgotten as young startups with even flimsy product-market fit were able to raise staggering sums of capital while interest rates enjoyed their last few quarters near zero.

Things have changed. We’ve seen former darlings go through the wringer, the downfall of much of the SPAC class, and some whole-cloth startup deaths.

But some private technology companies in less flashy markets didn’t fall prey to the 2021 hype cycle. Those companies are, in some cases, chugging along toward an IPO the moment the window opens again. And they haven’t gotten too much credit for their work.

Call it the revenge of the quiet companies.

Give us an example, yeah?

But of course. Back in the days of Box versus Dropbox, Egnyte competed along similar lines. Since then, Egnyte, much like Box and Dropbox, has worked to expand its product offering away from the cloud storage market to the point that it’s actually a bit hard to recall what it did to begin with.

Finding and affording child care is one of the biggest challenges parents face. Kinside makes the process easier by not only providing a marketplace of verified carers, but also helping parents tap into their flexible spending accounts (FSA) and other benefits to afford care. Today, the company announced it has raised $12 million in Series A funding, in a round led entirely by mothers. They include Sasha McKenzie of Wellington Ventures; Joanna Drake of Magnify Ventures; Initialized’s Alda Leu Dennis; and Maven Ventures’ Sara Despande. The round brings Kinside’s total funding so far to $16 million. TechCrunch first covered the Y Combinator alum when it announced a $4 million seed round led by Initialized in December 2019.

Brittney Barrett, Kinside co-founder and chief marketing officer, told TechCrunch that the round’s composition came together organically.

“Investors are naturally attracted to businesses that are dedicated to solving pain points that they themselves experience or have experienced. This is why representation is so important in the venture world,” she said. “ We didn’t seek out a round of only mothers, but working mothers are acutely familiar with the painfully inefficient process of finding care. They also know how much families spend on care every month so they understand the scope of the financial opportunity.”

Kinside was founded in 2018, after co-founder and CEO Shadiah Sigala spent weeks calling daycares and preschools, trying to find a place that would take her baby son and three-year-old daughter. Since its launch in 2019, Kinside’s marketplace has grown to thousands of child care centers, and it is used by parents from over 3,000 employees who use it to search for open child care spots and get pre-negotiated tuition rates. To qualify for Kinside’s marketplace, carers need to be licensed by the state, and also pass Kinside’s safety vetting requirements. Barrett explained that the company worked with state licensing experts to develop a proprietary state-by-state vetting framework that evaluates years of license and visitation history, and has a national failure rate of 5%.

Barrett said that Kinside leverages the volume of the employer-based system to pre-negotiate rates with providers. It integrates with dependent care FSAs so parents can use their pre-tax funds as they become available, and blends them with secondary payment methods, like their bank account. This eliminates the need for claims and reimbursements, making the process of paying for child care with benefits easier.

Kinside takes an agnostic approach to the kinds of employers it works with. For example, Barrett said they range in size from employers in the tech space with 20 employees and ones in the manufacturing sector with 20,000.

The latest round of funding will be used toward increasing Kinside’s marketplace functionality and developing new tools that will further expand its dynamic inventory as the company aims toward expansion to 10,000 employers and one million parents. Dynamic inventory means that the company knows in real-time when a spot becomes available at a centers, helping parents in the search. In the long-term, Barrett said that Kinside plans to leverage that data to create the right amount and type of supply in the right areas, reducing child care “deserts” or helping independent child care owners expand to a second or third location.

In a prepared statement, Magnify Ventures’ Drake said, “Finding accessible, affordable, quality child care has long been an undue burden for working parents in the U.S., and the pandemic has shone a bright light on the critical importance to employers of urgently solving for employees’ child care needs.”

At this point, covering the one-click checkout space feels like an exercise in horse-kicking, but we’d be remiss to skip our usual math on the Bolt situation.

Bolt is one of the better-known one-click players in a cohort of startups that offers software to e-commerce retailers that is similar to Amazon’s “buy now” feature. Our own Mary Ann Azevedo dug into the space in May after erstwhile competitor Fast imploded.

The Fast story has become a cautionary tale. The still-alive Bolt, meanwhile, is digesting a fundraising binge, a customer lawsuit, an outspoken CEO who transitioned to board chairman, a huge historical burn rate and a revenue base that appears incredibly modest when contrasted with its most recent private valuation. The issues facing the company are not unique; a host of unicorns are dealing with imbalanced revenue, burn and valuation numbers in 2022.

But with Bolt, we may have something of an extreme case. The Information reported on the company’s financial situation last week, giving us a peek into how the most richly valued startups in the market today are resetting their targets and spending in a more conservative market.

Earlier today, TechCrunch dug into the unicorn glut, the effect of many late-stage startups suffering from recent fundraises that pushed their valuation to impractical levels when compared to current pricing. We also discussed the years that it will take some companies to grow into their most recent valuations. The Bolt saga is one of those stories.

Bolt’s results versus Bolt’s valuation

Pulling from TechCrunch coverage of Bolt’s fundraising history and its layoffs, as well as The Information’s piece discussing the company’s financial results, the following:

Unicorn traffic jam, meet unicorn glut.

Private-market tech companies worth $1 billion or more have long been an indicator of investor enthusiasm. The number of so-called unicorns minted in a particular period was a workable indicator of how hot the venture capital market was at the time.

For example, the pace at which new unicorns were born grew sharply in 2020, per CB Insights data, rising from 25 new $1 billion startups in the first quarter of that year to 47 by Q4. Then, the rate of unicorn births multiplied, reaching 115 in Q1 2021 and peaking at 146 in the second quarter of the same year. Since then the number has slowly fallen, reaching 113 in the first quarter of 2022. It could drop into the double digits in Q2.

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The raw number of new unicorns is only a part of the dataset that matters. Venture capitalist and SaaS influencer Jason Lemkin recently noted on Twitter that the “vast majority of [venture capital investment] went into unicorns and decacorns the past [two] years,” and not earlier-stage companies. This means that the boom in venture capital totals was, to some degree, a unicorn bonanza.

The same CB Insights dataset makes clear just how much venture capital unicorns grazed last year. In 2020, for example, some $140.5 billion was raised in 633 nine-figure rounds — those of $100 million or more, a loose comp for venture deals that went to billion-dollar companies.

In 2021, those numbers soared to $366.6 billion from 1,569 nine-figure deals. The portion of venture capital dollars invested globally that went to deals worth $100 million or more rose from a little under 50% in 2020 to nearly 60% in 2021.

(When we discuss 2021 mega-rounds, we cannot fail to mention the rapid-fire pace at which Tiger Global put funds to work in later-stage startups. That said, the firm was not alone in its temporary exuberance.)

While the unicorn venture market is slowing — CB Insights says that 51% of Q1 2022 venture capital went to nine-figure rounds, or $73.6 billion in 364 deals — the largest deals to the most valuable startups cleaned up in recent years, and even more so as the venture capital market reached a peak last year.

This helped form the unicorn glut. What’s that? Lemkin describes it as a “massive overhang of growth investments that will take startups years to grow into.” The problem, Lemkin continued in a thread, is that many of the largest 2021 deals will take another three years or more to “grow into their valuations,” which “may slow down growth investment for years to come.”

In a fresh SEC filing this morning, Twitter shared a letter it received from Elon Musk’s legal team indicating displeasure with the company’s offered information regarding the level of “spam and fake accounts” on its service. This is the same concern that the technology entrepreneur has posted about extensively since his deal to buy the social media platform was settled earlier in the year.

Per the letter — which you can read in its entirety here — Musk considers Twitter’s “latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, [as] tantamount to refusing [his] data requests,” requests that the SpaceX and Tesla CEO says will help “facilitate his evaluation of spam and fake accounts on the company’s platform.”

The letter says that more data (and not just explanation of how the existing data was gathered) on Twitter’s non-human users — both natural and spam — is important for helping close the transaction from a financing perspective. “As Twitter’s prospective owner, Mr. Musk is clearly entitled to the requested data to enable him to prepare for transitioning Twitter’s business to his ownership and to facilitate his transaction financing,” the letter reads.

At the end of the short correspondence, Musk’s legal team threatens to kill the deal (emphasis: TechCrunch):

Based on Twitter’s behavior to date, and the company’s latest correspondence in particular, Mr. Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement. This is a clear material breach of Twitter’s obligations under the merger agreement and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.

Fighting words indeed.

In the wake of Musk’s various moves to at first influence the social network, and later to purchase it wholesale, the controversial poster has made a number of claims about how Twitter counts non-human users. Musk went as far as tweeting excrement-themed emojis at Twitter’s CEO on the social service, after Parag Agrawal penned a thread on how the company handles spam and bots.

The pace at which Musk went from charging headfirst into forcing Twitter to accept his bid, valuing the company at $54.20 per share, to attacking the company, its leadership, and data concerning non-human users was rapid — and, many speculated, indicative of his desire not to complete the deal at the agreed upon price. Since the deal was forced into existence, the value of technology shares has broadly fallen, making the transaction appear more expensive as time has gone along.

Now we have, from Musk’s team, a clear threat that he may walk if he doesn’t get more information. Whether Musk’s demands are in good faith we leave to you. But the situation does raise an interesting conundrum. If Twitter does want to force Musk to pay up at the agreed-upon price, it may concede and share more data. But if it does, what’s to stop Musk from shitposting on Twitter about the disclosed information? His letter says that he will “of course comply with the restrictions provided under Section 6.4, including by ensuring that anyone reviewing the data is bound by a non-disclosure agreement,” but does anyone take that claim seriously?

Happily, if Twitter doesn’t want to sell to Musk — recall that the company originally enacted a poison-pill defense to fend off his overtures — it can simply not share any more information, allowing its potential acquirer to try to wriggle out of the deal.

Investors are betting that the latter case is more likely, selling shares of Twitter this morning, pushing the value of the company’s stock down by 5.6% as the markets prepped for the open.